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Sunday, April 15, 2012

Coming Soon: Social Security Checks to Switch to Direct Deposit or Debit Cards...

Coming Soon: Social Security Checks to Switch to Direct Deposit or Debit Cards...

By March of 2013, almost all Social Security recipients will receive their monthly disbursements by either electronic deposit into a checking or savings account or a debit card. The switch began under a law signed in 2010 that aimed to reduce lost or stolen checks and reduce processing costs. According to the Treasury Department, 90% of those who receive Federal Benefits already have made the switch. The program is similar to the Food Stamp program which changed to debit cards back in 2004.

Those over 90 years of age will be exempt from the switch and other waivers may be granted in the cases where using a debit card would be a hardship, yet the Department describes those exceptions would only be granted in "extreme, rare circumstances."

The switch saves Social Security about 120 million dollars a year, with a savings of over a billion dollars projected over the following ten years. There's also potential for reducing lost or stolen checks, which numbered 540,000 benefit checks in 2010.

The Treasury Department is trying to be especially helpful with its oldest recipients. "This will affect some very frail elderly people who are living by themselves, many of them, and doing well, but usually within the context of that old paper check that they deposit in the bank," said Web Phillips, a senior policy advisor for the National Committee to Protect Social Security and Medicare. "The change has to be handled carefully and with a lot of sensitivity so that there aren't people who lose track of a payment or don't understand that they have a card that came in the mail that's the source of their payment," Phillips said. "That's our concern."

Another downside to this transition is the effect on the already struggling Post Office who has lost a substantial amount of its business to the use of email and electronic bill-paying.

There is a website that Treasury has developed to assist the public in making the change. Visit www.GoDirect.org or phone 1-800-333-1795 for more information.